The Epic Saga of Joel Silver: Money Struggles, Feuds and (Another) Second Chance
A meeting in Palm Springs led to a deal with a Canadian billionaire as the 1990s' most high-flying producer concludes a long search for financing amid heavy debts; lavish, leveraged homes; and, sometimes, a trail of bad feelings. Says Silver: "There are always people willing to say things that are not nice."
This story first appeared in the May 8 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
On the evening of Saturday, April 4, Joel Silver, the storied and controversial producer of The Matrix and Lethal Weapon series, attended Robert Downey Jr.'s birthday party at Barker Hangar in Santa Monica with a wealthy friend in tow. It was quite a dazzling Hollywood event, with Steely Dan and Duran Duran entertaining guests, including Jennifer Aniston, Reese Witherspoon and Edward Norton. Silver had told associates that after a long search, he had found a wealthy investor who would help him launch a rejuvenated Silver Pictures. Few in attendance at the party, however, recognized his guest.
A couple of weeks later, on April 27, that person was revealed to be press-shy Canadian billionaire Daryl Katz, the 53-year-old chairman and CEO of the Katz Group of Companies, who has made an undisclosed investment in Silver's company. As Silver's friends hoped and his many enemies feared, the flamboyant producer had found a fresh source of financing at a time when many believed the prospects were bleak. For now, it appears, Silver can keep on living — albeit likely scaled back — as he did in the glory days, when Warner Bros. provided him with a rich deal and frequent advances running into tens of millions of dollars.
Silver plans to make this Venice post office (photographed March 18) his headquarters, but the move has been stalled in a lawsuit and lien.
As studios have trimmed expenses and cut loose longtime producers, Silver, 62, is part of a growing fraternity of big-name players who have been forced to raise money for their projects on their own and hustle to sell them in a tough market. The same fate has befallen such A-listers as Ron Howard and Brian Grazer, who for many years had a comfortable home at Universal. What has made Silver different is his well-established reputation as one of the industry's most extravagant players. Numerous former associates and reporting by THR reveal that Silver long has lived beyond even his extraordinary means, prompting many in Hollywood to wonder how he and his Silver Pictures would stay aloft in a post-studio-deal world. And Silver, a divisive personality with a trail of shattered relationships, is aware that some had fervently hoped for a crash.
"Yes, I am a big target and I have been very successful, and there are always people who either may not have [had success] or for whatever reason are not fond of my success who tend to be very willing to say things that are not nice," he said recently, seated in sweats and a black hoodie for a testy interview on the patio of his Brentwood estate with his lawyer by his side. Not nice, he says, and in many cases "not true."
As Silver points out, he has close and loyal friends, including Downey and his wife, Susan; NBCUniversal vice chairman Ron Meyer; and WME co-CEO Ari Emanuel, who for the past year has labored to help Silver find new financing. But a source says it was another Silver associate, Todd Morgan, chairman of Bel Air Investment Advisors, who connected Silver with Katz. Silver was visiting Morgan at Morgan's property at the BigHorn golf resort in Palm Desert, Calif., when he was introduced to Katz, who also has a house nearby. (Morgan did not respond to a query about his role.) The owner of the Edmonton Oilers hockey team, Katz built a $3.4 billion fortune with a chain of more than 1,800 drugstores. He is said to perceive the investment in Silver's company as part of an expanding sports and entertainment empire.
The Katz investment is believed by many in Hollywood to have been an urgently needed solution to a pressing problem for Silver, known for his expensive taste. His massive Brentwood house, where he lives with his wife, Karyn, and two young sons, is just one of his showcase properties. Designed by the late Mexican architect Ricardo Legorreta, it has a soaring purple entrance hall leading to an enormous atrium in which outsized columns surround a large, round, shallow pool. An iconic mural reminiscent of Diego Rivera is built into one wall. In addition to the residence in Brentwood, which Silver valued at $40 million in an unaudited 2013 financial statement, the producer owns a house on tony Carbon Beach in Malibu, appraised in June at $30 million to $35 million (on the same statement, Silver valued it at $40 million).
Silver also has lovingly restored — and heavily mortgaged — Auldbrass, the only plantation designed by Frank Lloyd Wright. The producer has transformed the South Carolina property — which he valued at $5 million — into a wonderland stocked with exotic animals, including, at one time, a very costly hippopotamus.
Those who spotted Silver around town in recent months noted that he continued to consume conspicuously even while searching for financing. On Oscar weekend in February, Silver showed up for the star-studded Tom Ford fashion show driving a $400,000 Maybach. His wife recently acquired a bespoke Rolls-Royce convertible in purple, a tribute to the L.A. Lakers. (Silver is a courtside regular at games.) And in March, he indulged in an annual tradition: shipping the staff of the Venice trattoria Vini Da Arturo from Italy to Los Angeles for 11 days to cook such favorites as scaloppine senape e panna (veal with mustard and cream) and spaghetti al gorgonzola for him and his guests.
Even as this went on, there were signs of strain. The historic post office building in Venice Beach that Silver said he would restore as the future home of Silver Pictures has stood covered with graffiti, with little sign of activity. Not only is the project stalled, but interior designer Judith Lance, who for 14 years met Silver's fastidious expectations, has discontinued her relationship with him. Silver says he had "problems with her for a long time" but declines to elaborate; Lance declines comment.
Silver (far right) in 1998 at a Chinese Theatre hands-and-feet ceremony for Danny Glover with (from left) 'Lethal Weapon 4' stars Rene Russo, Glover, Mel Gibson, Joe Pesci, Jet Li and director Donner, who no longer speaks to Silver.
What might have surprised even those familiar with Silver's costly lifestyle and the challenges of financing his Silver Pictures is not that he has quested for cash, but the lengths to which he has gone in recent years to get it. According to documents obtained by THR, including those from a lawsuit, Silver has borrowed as much as $29 million against his homes in Brentwood and Malibu through "hard-money" lenders known to charge interest as high as 20 percent. In Silver's case, the rate is said to be 13 percent or, factoring in points on the loan, 18 percent. Silver says he believes the rate is 10 percent. He acknowledges that he has taken out some high-interest "bridge loans" using brokers — some with questionable pasts — who are unknown to most upper-echelon Hollywood players. "I didn't even know who they were," says Silver. "I didn't know about it until after the [loan closed]."
Drawing additional focus to Silver's financial situation was a story circulating in Hollywood that Silver made an attempt to secure millions of dollars to pay his company's overhead from his friend and, for many years, most important patron, the well-regarded former Warners co-chairman Terry Semel, now 72. This proposal, which Silver vehemently denies making, would not have given Semel an interest in Silver's films, which, according to sources, would have made it nearly impossible for the money ever to be recouped. "This is completely and totally untrue," Silver says. "Never, ever, ever occurred." He says Semel approached him about investing in his movies after Silver departed Warners in 2012, but they never reached an agreement. (Katz's undisclosed investment is said to include an interest in the films.)
Overall, says Silver, the notion that he has been showing signs of financial stress is merely wishful thinking by those hoping to see him fall. "It's been a little bit of a struggle coming out of the studio system, going into the independent system, but I like it," he says. "I like being able to make the movies I want to make the way I want to make them. … I'm very happy with the situation. Very happy. It's taken a little while to put everything together, but we're doing that, and I'm very happy about it."
From the start, everything about Silver was outsized — his feuds, his appetite for wealth and his girth, though he has slimmed down recently thanks to surgical intervention. Profane and sometimes abusive, Silver has been known to relentlessly court the spouses of those with whom he wants to ally himself. "He takes them shopping, decorates their homes — kind of buys his way into the family," says Richard Donner, who produced (with Silver) and directed all four Lethal Weapon movies. That franchise helped cement Silver's status at Warners as an A-lister but Donner now is one of Silver's avowed enemies. "He's charming, he's funny, he's delightful. But keep your eye on him," says Donner. "Joel will use you and get everything he can."
George Clooney (left) with Silver at the 1999 premiere of 'The Matrix,' one of several franchises Silver produced for Warner Bros.
For the many years that Silver was at Warners during the '80s and '90s, the studio was known for its indulgence of talent. "The guy had a deal at a bank called Warner Bros.," says a former Silver Pictures employee. "They put people into sick overall deals, paid for sick offices. Please, God, someone give me the deal this guy had. It will never happen again."
Donner says Silver had "a good story sense in areas" and a strong instinct for marketing. But in 1999, Donner split with Silver after an incident in which he says Silver sent "one of his minions" to demand that Donner urgently sign a document relating to a project that the two were working on. "He said, 'If you don't sign it right away, Joel will never speak to you again,' " recalls Donner. "And we never spoke again." Donner says he was later advised that signing the document could have exposed him to personal financial liability for the project.
Ultimately, Donner says he threatened to sue Silver for significant profits from their HBO horror anthology series Tales From the Crypt, which ran from 1989 to 1996. "I couldn't believe it," alleges Donner. "I guess he was desperate for money. If he had called me, I would have given it to him." Donner also couldn't believe it when he was warned that Silver had his sights set on Donner's offices on the Warners lot. In 2001, Donner's deal with the studio ended after 20 years, and Silver moved right in.
Silver denies that he ever demanded that Donner sign such a document or had a dispute with him over Tales From the Crypt. Acknowledging that he hasn't spoken to Donner in many years, Silver says he doesn't remember any incident that precipitated the split. "I think that we just grew apart," he says.
Silver's signature movies — action-adventure hits — are not awards contenders. He once described fans of his films as "scum of the earth" and was known for saying, "I don't make art, I buy it." (In his 2013 financial statement, Silver valued his art collection at more than $17 million, though he had borrowed at least $3.8 million against it.)
For many years, it was Silver's strategy, according to those who worked with him closely, to remain in debt to Warners. He felt it bound the studio to him and made it more likely that he would be given movies to produce. Even then, Donner says Silver was spending so heavily that he insisted Silver meet with Donner's business manager. But Silver stayed afloat as the studio, at Semel's instigation, advanced him tens of millions of dollars. (Silver denies that it was ever his strategy to be in debt to Warners and points out that important creative talent routinely got advances from the studio.)
Starting with Lethal Weapon in 1987, Silver had a string of huge hits; he has made more than 60 films that collectively have sold more than $10 billion worth of tickets, adjusting for inflation. Even after Semel left Warners in 1999, Silver maintained his relationship with the studio. But in the late 2000s, Silver had some expensive misfires with such films as Speed Racer and Whiteout. When Warners finally pulled the plug in 2012, The New York Times framed the question: "How does a larger-than-life, free-spending producer fit into a movie business that has been tightening up?"
Silver grew up in the wealthy suburb of South Orange, N.J.; as a teen, he told high school classmates that he was going to be David O. Selznick. He attended but did not graduate from NYU film school. Naturally, Silver migrated to Hollywood, where producer Larry Gordon hired him as an assistant and driver. Gordon promoted him steadily, though at this point, the two men have not spoken in decades.
Silver’s home on Carbon Beach in Malibu is the subject of a complicated loan that led to a lawsuit and threats of more litigation.
Silver briefly became an executive at Universal, upsetting his bosses by billing the studio for thousands of dollars in art deco furniture for his office and for throwing himself a $10,000 birthday party. As the executive on the Gordon-produced 1980 Olivia Newton-John vehicle Xanadu, he was replaced in the middle of production when the budget skyrocketed. He teamed with Gordon again as co-producer of the film and then took another executive stint at PolyGram. But Silver hit trouble once more on 1981's The Pursuit of D.B. Cooper. PolyGram executive Frank Bauer alleged in The Wall Street Journal that Silver had asked him to "conceal or delay" spending reports as the film went over budget. Silver disputes that account, saying: "I never asked anybody to delay anything. When you work with a studio, you have to be completely and totally transparent at all times." After barely a month at PolyGram, Silver joined Gordon once again and they made 1982's 48 Hrs., which gave Silver his first full producer credit, and other films, including Brewster's Millions and Die Hard. During production of the first Die Hard, Barry Diller — Fox's chairman at the time — was said to have banned Silver from the lot for having his driver crash through the gate at the studio's exit to avoid a line of cars waiting to enter. On 1990's Die Hard 2, which was supposed to cost $42 million (a big number at the time), the price tag ballooned to $67 million (it grossed $240 million worldwide). It was reported that when Fox executive Mike Joyce admonished the producer, Silver would reply, "F— you, slimeball."
As Silver went on to produce another Fox project, 1990 Andrew Dice Clay flop The Adventures of Ford Fairlane, "it became crystal clear there were no controls [on how money was being spent] whatsoever," says one executive then at the studio. Joe Roth, then chief of the Fox film studio, told Premiere magazine that the situation with Silver was "a nightmare." Eventually, Fox broke with Silver, as did Gordon (who was not involved with Ford Fairlane). Silver moved to Warners.
Silver wasn't the only person to ask the studio for advances, but a former Warners executive says he stood out for his frequent requests. "His fee and his backend [cut of profit] would be deducted from the money he owed," says a former studio insider. At one point several years ago, this person says the studio became uncomfortable with Silver's demand for yet another advance and asked him to pledge his homes as collateral. Silver says he doesn't recall this happening.
A knowledgeable source says Silver's need for cash was so pressing that he made deals with Warners "that got him cash sooner and may not have gotten him as much value in the long term." For example, he would waive a backend deal that would have paid him 7.5 percent of a movie's profit and say, "Give me $3 million now," says this person. Silver denies that he ever made such a trade-off. Former Silver associates say that Silver getting pulled in as a producer on Sherlock Holmes with Downey in 2009 got him out of a particularly difficult money crunch. Downey's relationship with Silver dates back to the 1985 film Weird Science, and his wife, Susan, worked for years at Silver Pictures.
When Silver's relationship with Warners finally ended in 2012, Silver took cash in lieu of future revenue from his movies — a move that a former Warners insider says was equivalent to selling out retirement income. "Nobody in his right mind who owns [rights to] piles of movies would sell," says this person, because those films can generate income for many years, especially in a time of rapidly changing technology. "Who the f— knew there would be a Netflix?" he asks. Warners calculated the value of the future earnings of films from Lethal Weapon to Sherlock Holmes, deducted Silver's outstanding debt — which, according to sources, exceeded $30 million — and agreed to pay him about $30 million. Silver disputes that he had owed the studio more than $30 million but declines to provide a specific figure.
Silver bought the historic post office in Venice as his company's new home, and Universal said it had made a deal to distribute Silver's films, though this time the producer had to find outside financing. He got that through French company StudioCanal, which backed Silver's 2014 hit Non-Stop. The Liam Neeson thriller grossed nearly $223 million worldwide. Expecting a payday in excess of $10 million, Silver pressed for an advance. StudioCanal said it would advance only $4 million, according to an insider, prompting Silver to "go ballistic."
Sources say StudioCanal executives, who declined comment, already had become wary of Silver's spending. They wondered, for example, why Javier Bardem was paid $5 million for a secondary role in Silver's next project, The Gunman, an action movie starring Sean Penn with a budget of about $50 million (not factoring in production incentives). StudioCanal CEO Olivier Courson "felt like he was being disrespected and taken advantage of," says a source with knowledge of events. "Whenever Joel goes to a location, he wants to fly private. They weren't accepting of that. I don't think a lot of people these days would be accepting of that."
The Gunman opened March 13 to only $5 million domestically. Silver says he clashed with star Sean Penn over the film and allowed Penn, in conjunction with director Pierre Morel, to complete it. "My name isn't on as producer," he says. "My company produced it, but I didn't produce it." In a statement, Penn responds: "Joel was on set, heavily influencing the film throughout the entire shoot. A collective decision was made late in postproduction asking Joel to step out of further contribution, to which he ultimately agreed. While I was briefly given an opportunity to example an editorial approach, in the end, as it should be, the director solely formed and completed the picture in Europe." Adds Penn, "I've known Joel for 25 years. His work, taste and reputation speak for themselves."
Silver owns the Auldbrass Plantation in South Carolina, the only plantation ever designed by Frank Lloyd Wright. In 2012, the South Carolina House of Representatives honored Silver for his work on the site, which he valued at $5 million.
Non-Stop brought Silver some welcome success, but still, the money wasn't flowing as it had in the Warners days. By early spring 2014, Silver turned to John Bryan, CEO of the Watley Group, a Los Angeles-based firm that describes itself as specializing in corporate restructuring and financial-advisory services. Bryan made news in 1992 when he was surreptitiously photographed apparently sucking the toes of a topless Sarah Ferguson, the Duchess of York, and he had been investigated for his financial dealings in more than one country in past years.
Bryan, who did not respond to requests for comment, was supposed to help Silver work out financing for his film business, but he also pursued a sizable loan for Silver against his Brentwood and Malibu homes. Bryan brought in another broker named Ronald Goldberg, who owns a firm called Alliance Capital. Goldberg did not respond to requests for comment; court papers suggest he currently is in a South Dakota jail awaiting prosecution for alleged bank fraud.
According to a knowledgeable source, Goldberg then brought in Lending Bee, a North Hollywood-based firm with a website that describes it as "the leading provider of comprehensive real estate services in the state of California." Nonetheless, real estate professionals who deal with entertainment industry clients say they are not aware of the company. Lending Bee is a "hard-money" lender that provides high-interest loans to customers who need quick cash. Among those involved in pursuing the loan for Silver was Boris Dorfman, listed on the Lending Bee site as the firm's regional manager, and Oleg Sergeyev, who is listed on emails obtained by THR as being in "investor relations." Reached by THR, Sergeyev said he is Dorfman's assistant and referred calls to him. Dorfman declined comment.
The quest for the loan led next to Amir Farrokh Heshmatpour, founder of AFH Holding & Advisory LLC, which lists an address in Beverly Hills. Among other activities, AFH also describes itself as a hard-money lender. Reached by THR, Heshmatpour describes Lending Bee as a firm run by "a bunch of young entrepreneurs" and says he has done some projects with that company. Asked how the loan made its way from Lending Bee to him, Heshmatpour says, "This was not their cup of tea. They don't do super-jumbo loans." Overall, he says of the Silver matter, "This wasn't that big of a loan, and I don't know how all these characters have their fingers in it."
Silver concurs. "I didn't even know who they were," he says of some of the brokers involved in obtaining the loan. "That's the loan broker business, I guess. I didn't know about it." Silver says Steve Richards, who left his job as co-president of Silver Pictures in January, connected him with Bryan. Richards did not respond to a request for comment, but a source says that given Silver's financial profile, Richards' options for finding a willing lender were limited.
Katz, Silver’s new investor, whose net worth is pegged at $3.4 billion by Forbes, also owns the Edmonton Oilers.
Heshmatpour says he is partners with the person who was the final stop in Silver's quest for the loan: Don Hankey, perhaps one of the lowest-profile billionaires in Los Angeles. Hankey, the principal owner of the Hankey Group, a private automotive services company with seven subsidiaries, including a lending firm, built much of his fortune by handing out high-interest car loans to people with poor credit. "There's hard money and there's bank money and there's in-between," says Heshmatpour. "Don's in between. He fills a big void out there."
Hankey and his wife are Silver's Malibu neighbors, with a 10,000-square-foot house on Newton-John's former estate known as Xanadu (curiously bringing the saga back to a Silver film). He did not respond to a request for comment. Silver says he has met Hankey, who is "a reputable, wonderful guy."
Ending up with $13 million from Hankey, the various brokers involved in arranging the loan expected Silver to pay $489,000 in fees. According to a recently filed lawsuit and escrow instructions obtained by THR, Bryan's Watley Group anticipated getting $165,000; Goldberg's Alliance was awaiting $40,000; Lending Bee expected a fee of $75,000; Heshmatpour was to receive $75,000; and a Los Angeles law firm called Levene Neale Bender Yoo & Brill expected to get $134,500. (These fees are listed on instructions prepared by a San Fernando Valley-based company called Escrow of the West. Contacted regarding the fees, escrow officer Victor Reshetnikov declined comment other than to say that he followed instructions "agreed upon by all parties.") As recently as early April, Silver had not paid those fees, and apparently the brokers were considering suing Silver collectively — teaming up despite the fact that Goldberg already has sued Bryan in federal court alleging that Bryan failed to cut him in properly on the as-yet-unpaid fees.
While Heshmatpour declines to discuss the precise terms of the loan, he says he and Hankey did due diligence and were confident that Silver would be able make good on it. "His rate is not 3½, 4 percent," says Heshmatpour. "But we're not stupid. … We lend on hard assets." He adds, "Joel's not leveraged at all," considering the value of his real estate holdings. He adds that he and Hankey do not loan with an eye to foreclosure.
Heshmatpour says Silver's loan was his first experience in the world of Hollywood. The producer "was going 100 miles an hour" trying to set up his new offices and had "way too many people doing too many things," he continues. Once he and Hankey were involved, he says, the loan was pulled together in a matter of days.
Since then, Silver is believed to have increased the amount of the loan from Hankey by $10 million or more.
Silver’s Brentwood estate, which he valued at $40 million, features an ornate indoor reflecting pond and is maintained by a uniformed staff.
Silver believes he has promising projects in the pipeline, including The Nice Guys, a thriller from Lethal Weapon writer Shane Black. Warners didn't finance the film but is set to release it domestically in May 2016. The financing from Katz presumably will enable him to rebuild: In the past 18 months, several of his company's film executives have left, including 19-year veteran Richards. And the fresh money should help Silver resume construction on his new offices. When he announced the acquisition of the former post office on Windward Circle in Venice in October 2012 (for $7.6 million), Silver hoped to complete the work in 18 months. But Silver says when the floor was removed to install a heating and cooling system, the basement filled with water. (The building is only a block from the ocean.) "I could have filmed Phantom of the Opera down there, and there could have been guys with torches and boats," he says. Ultimately, the system that was supposed to be installed was jettisoned, which, according to Silver, set the project back a year and led to "legal ramifications." (Vendor Clay Dunn Enterprises has a lawsuit pending against Silver over unpaid bills.) Silver says other liens on the building now have been resolved, and he expects to be in his new offices by 2016.
Some of Silver's enemies are hoping that even this infusion of financing is nothing more than a short-term fix. But others maintain that Silver's powers of persuasion and track record of hits will be enough to keep him in business. Action pictures may not play domestically the way they used to, but the foreign audience is growing.
Silver says that malice is nothing new in Hollywood. "I don't begrudge anybody saying what they want to say," he says. "I know I am a fiercely loyal friend. I stand by my friends, I love them, and I am generous with my family and friends. I am a generous guy, and I have a good life. And I can't speak to why people are willing to say things about me that are in many cases not true."